SENIOR ADMINISTRATION OFFICIAL: Let me take five
minutes to kind of go through what some of the key points that
were made today at the meeting. As you know, the leaders met
alone in the palace, but there was one representative from each
country that was in a separate room watching this on television
and listening to the audio.

The first thing I'd say is that I think there was a
real sense that this was an historic step that they were taking.
A number of the leaders referred to it in those terms, and I
think generally the mood of the meeting was one of seriousness
and one which I think they all realized they were making an
irreversible step.

Prime Minister Bolger from New Zealand said that
this was an historic mission that 18 countries of such diversity
should undertake to lower barriers to trade together. And he
called it a great ambition.

So I think there was a sense of the importance of
what was happening. Second, there was a number of references
during the discussion to the fact that this process really began
last year in Seattle, the Blake Island convocation of this group
invested the leaders in this organization for the first time, and
there were a number of leaders that expressed their gratitude to
President Clinton for having begun this process.

Prime Minister Keating said there's nothing
inevitable -- there was nothing inevitable that we should be at
this point embarking on this journey. Third, there was a very
clear consensus, both for having target dates and for having the
two target dates. I think the clear purpose of the dates
themselves was to establish a firm goal. One of the leaders said
without such a firm goal, we'll tend to slide backward. We need
a date to coalesce this activity and this process forward.

The idea of the two dates reflects the different
stages of development of the countries in that room, a wide
variety of stages of development. But I Think the President also
made clear in his comments that we will proceed here on the basis
of opportunity and benefit going hand in hand; that while some
countries may reach the destination of free trade later than
others, there will be reciprocity of this process as it proceeds.

There was a discussion -- throughout the discussion,
I think, a clear sense of why these countries were embarking on
this. The President has explained it from our perspective.
Obviously opening, lowering trade barriers in this market -- in
this vast Asian market, is extraordinarily important to the
United States. But from the perspective of the other leaders, I
think many of them recognize that trade expansion is important
for them to sustain the kind of growth that they have had over
the past decade; that they need not only expanded trade, they
need the technology and skills that come with trade.

At one point, in response to a point that Prime
Minister Mahathir made about expressing some reservations about
setting a date and going too quickly for small countries, Prime
Minister Bolger said, speaking for a small country, New Zealand,
that if we don't move towards open trade, the world will pass us
by, we will be left behind; speaking of the reason why the
smaller countries can rise to this challenge.

In terms of how we get to this point, the President
described in some detail -- there was a charter given to the
ministers to work over the next year on an action agenda, on a
blueprint, which will be ready for the leaders to look at in 1995
at the meeting in Osaka. Many of the leaders talked about the
need for a phased, organized approach, a step-by-step approach.
We in the United States describe this as a building-block
approach in which one agreement gets added to another. But
clearly, the next step here will be in Osaka.

Finally, as the President mentioned, most of the
leaders expressed the extreme importance of having a GATT
agreement as part of this process, both as an organizing
principle, and second to assure that as regional trade
cooperation proceeds, it does so not as separate trade blocks,
but within the context of a multilateral trading system.

Let me stop there and we can -- try to respond to
your questions.

Q Can you speak a little bit more about Prime
Minister Mahathir's reservations about this?

SENIOR ADMINISTRATION OFFICIAL: Prime Minister
Mahathir, who ultimately endorsed the communique, but with his
own reservations, expressed concern about whether -- two
concerns. One was a concern about whether he ought to bind a
future generation to an arrangement that is arrived at today, not
being able to see into the future.

President Clinton later, in a sense, responded to
that. He cited President Kennedy's having established a goal of
sending a man to the moon in a decade not knowing at that time
whether or not that goal could be achieved, but the goal itself
propelling the effort. So one could concern that Mahathir
expressed was this notion of not wanting to decide now what
things might be like in 2010 and 2020.

And I think the second concern he expressed was the
ability of small countries to compete in an open-market situation
with large countries; that in an open trading environment, the
resources of the large countries will make it difficult for -- he
cited, for example, for telecommunications companies in this
country to survive.

It was at that point that Prime Minister Bolger
responded by saying that it is particularly the small countries
who have to join in this effort, because to not be part of this
kind of open and expanding system is to be left behind.

Q Did he urge any change in the language of the
--

SENIOR ADMINISTRATION OFFICIAL: No, he did not, but
he expressed a series of reservations which he wanted to be a
part of the official record of the meeting, but which were not
explicitly embodied in the document.

Q May I follow-up? Are these reservations --were
these reservations first presented as amendments to the action of
the document?

SENIOR ADMINISTRATION OFFICIAL: No. He started off
by saying that he would go along with the consensus, but that he
-- and he had reservations; he believed that they were consistent
in spirit with the direction of the document, but he wanted those
reservations to be his own reservations and that of his country
to be known.

I would say that Malaysia was the only country that
expressed, I think, serious reservations about the direction.
But, as I say, he began his presentation by indicating that he
would be part of the consensus.

Q The U.S. has signed NAFTA and has got a date to
open the Pacific market. But it's not done much to do something
similar with Europe. Can you explain if there is something in
the making to create a unified market across the Atlantic, and if
there isn't, why.

SENIOR ADMINISTRATION OFFICIAL: Well, if you look
at the degree of integration now between the United States and
Europe, these are, in essence, the most integrated large markets
in the world. There are tariff boundaries between the two -- in
between North America and between the United States and between
Europe long ago began to decline precipitously. Investment flows
are substantial. They are already highly integrated and highly
harmonized. The concern that we have had with respect both to
Asia and to the rest of the Americas is to begin to open those
markets so that the degree of integration, the degree of trade
liberalization begins to be equivalent to that that exists
between the United States and Europe.

Q Could you explain what seems to me to be the
tension here between the reciprocity implied by the President
when he said no give-ups, and the other hand, the two stages --
the two-track approach -- because the developed countries are, in
effect, being asked to give up first, before the developing
countries --

SENIOR ADMINISTRATION OFFICIAL: Not really. There
are two models for how this will occur, and in fact, there will
be a blend.

The -- think first of tariffs and think of the
automobile example that the President referred to -- that even
after GATT, the tariffs in Indonesia, Malaysia, the Philippines,
Thailand, on automobiles ranges between 30 and 60 percent. The
tariff in the United States on automobiles is 2.5 percent.

What will happen in those countries, of those four
that are not industrialized -- and that will be -- get determined
as the blueprint is put together and as time goes on -- would be
that the track through which -- by which a final low level,
whatever that number is, is reached will be different for the
industrialized -- for the developing countries than for the
industrialized countries. But from the perspective, let's say,
of the United States, the changes are overwhelmingly in the favor
of the United States.

And it has been a long time, actually it's been
since the Kennedy round, at which there was an actual one-for-one
equivalence, because it was long-recognized that there was no
basis for agreement -- that what one looks at in tariff changes
is bundles and equivalences.

The second model is going to be what my colleague
was calling a modular approach, which is going to be -- which
would be agreements that get laid in, in essence, on top of each
other -- an investment agreement, a sector agreement, an
increasingly common intellectual property regime. Those are all
notational because they have to be agreed on over the next year.
Those will be much more on the basis of those countries that
agree with the -- that join the agreement get the benefits, and
those that don't don't. So there will be operating in this two
models. And what will inevitably occur will be a blend.

SENIOR ADMINISTRATION OFFICIAL: Let me just add on
maybe-self-evident point -- the fact that the endpoint may be
different doesn't mean the starting point is different. I think
that's the key here. That is, developing and industrialized
countries can begin this process together, particularly since the
developing countries have much higher barriers in many cases than
we do. If they're coming down over a longer period of time,
they're still coming down off a higher base. We benefit
substantially right from the beginning by the fact that those
barriers are coming down.

So they may get to the end point at a different
point, but the reduction of barriers begins -- could begin right
away.

SENIOR ADMINISTRATION OFFICIAL: The thing to
remember is that, in terms both of tariffs and of basic nontrade
barriers or lack of them, the United States is the most open
economy in the world. Therefore, agreements of this kind always
benefit us.

Q Can you interpret Mahathir's list of
reservations that he attached to the -- that sort of semiattached
to the draft agreement. He didn't stand in the way of
the consensus of the draft communique, but he did produce a list
of reservations he had, one being that he doesn't view 2010 and
2020 as binding, only as indicative. Can you sort of -- what's
your cut on this? I mean, is this -- is he holding the U.S. you
as hostage until the Malaysia summit or is this --

SENIOR ADMINISTRATION OFFICIAL: No, I think he
raised a lot of issues that will have to get resolved in
designing this blueprint. And, you know, the President's made it
clear that we're not going to enter into agreements that don't
have equivalent opportunities. So, that will be our criteria of
what agreements are good agreements.

It may be that next year that Malaysia decides not
to be part of this process or only part of this process. To the
extent it's part of the process, it has to accept the obligations
of everyone else. I think he was not blocking a consensus of
moving forward, but I think we'll see next year whether or not
Malaysia -- the extent to which it actually participates in this
enterprise.

Q guess, I mean --

SENIOR ADMINISTRATION OFFICIAL: I don't know. I
think -- he wasn't there last year, and he was here this year.
So we're making progress.

Q Did you feel you got a little blindsided by
South Korea today?

SENIOR ADMINISTRATION OFFICIAL: No. The question
here of having a 2020, 2010 has been on the table for sometime.
I think those of you who have -- at briefings that my colleague
and I have done in Washington over the past three or four weeks,
in all of those briefings, we have said that the outside will be
2020, and there is quite conceivably -- quite likely, I think we
said -- would be an interim target for the developed nations.

South Korea has, I think, a particular problem with
the way in which the draft was worded and the use of the term
"new industrialized economies." I think the change that was made
does not change the substance in any significant way.

Q You had hope that there would be more
supportive -- (inaudible) -- of 2010 date, weren't you, going
into this this morning?

SENIOR ADMINISTRATION OFFICIAL: No. I think -- no.
Again, the briefings we've done over the last two or three weeks
have said that the goal here was an outside date of 2020, and
probably an interim date for developed countries of 2010.

Q These are all very competitive economies -- I
mean, South Korea and China and Taiwan -- doesn't it seem a
little bit distressing that they couldn't sign onto open up their
markets sooner?

SENIOR ADMINISTRATION OFFICIAL: No. You know, this
is slightly off point, but I'll come to the point. While my
colleague was whiling his way in a non-air conditioned room in
Bogor, I gave a talk here to a business group. And part of the
talk had to do with the investment principles of the ministerial
meeting. And I expected us to be critiqued a bit on the
nonbinding nature and the relatively vaguely worded nature of
some of the principles. That wasn't the case at all.

What the businesspeople said almost universally was
that this is the first time that phrases like "right of national
establishment, national treatment" had ever been seriously
mentioned and treated in Asia by all of these nations. The exact
same thing holds here, is that what is absolutely phenomenal here
for anyone who has done business or worked in and around Asia
over the course of the last 15 years is the enormous step forward
that 18 nations have taken simultaneously.

SENIOR ADMINISTRATION OFFICIAL: I wanted to make
sure -- I think it was very clearly the expectation of the
leaders in the room that Korea would meet the goal of 2010. And
while -- as the President indicated, the process of defining
developing and industrialized will have to take place over the
year; I think that was clearly the expectation in the room.

Q This Japan has not demonstrated notable
leadership in trade liberalization and also has got difficult
political circumstances. How do you see them acting as hosts to
bring about this difficult blueprint over the next year?

SENIOR ADMINISTRATION OFFICIAL: They'll have to
step up to it. But they have indicated, both publicly and
privately, a desire to play the same role with respect to the
development of the blueprint that the United States did with
respect to the bringing together the leaders to the commitment to
the notion of a community, and that Indonesia did to the bringing
together of the leaders to a focus on a clear direction for free
and open trade.

This next year, it's the responsibility of the
government of Japan to carry that burden. They signed on quite
willingly to the declaration, and they clearly understand what
their process responsibilities are over the next year.

SENIOR ADMINISTRATION OFFICIAL: Let me just add one
thing, and that is, clearly, in the meeting today, a number of
leaders -- Prime Minister Chuan of Thailand, Prime Minister
Keating, Prime Minister Goh -- several, a very large number of
leaders in a sense gave Japan an implicit mandate. They said, we
want to have a work plan developed over this year, presented back
to the leaders in Osaka, and it's very important that this now be
translated into concrete steps.

So I think Japan now has an obligation that is
undertaken and has been charged with very explicitly by other
APEC leaders.

SENIOR ADMINISTRATION OFFICIAL: In a kind of an
indirect agreement with, or implicit agreement with the question
you asked, we regard this as a test and a challenge to the
government of Japan.

Q Could you explain how China responded to this
timetable --

SENIOR ADMINISTRATION OFFICIAL: I was not in the
room, and my colleague was.

SENIOR ADMINISTRATION OFFICIAL: China was
supportive. President Jiang spoke at length about this and
indicated that trade liberalization is a path on which China has
embarked and on which the region has to be committed to. And
there were no reservations expressed by him to this direction.

SENIOR ADMINISTRATION OFFICIAL: During the
bilateral with China yesterday, when the President underlined his
support both for the direction that we'd be -- of the declaration
in Bogor and for the Uruguay Round, there was -- the same point
was made, so that it wasn't -- by that point, or by today, it
wasn't a surprise to us that that was the reaction of China.

Q The United States has a $100 billion trade
deficit with East Asia. Are you concerned that if newly
industrialized countries are not held to this 2010 deadline that
the American public will react negatively to this agreement?

SENIOR ADMINISTRATION OFFICIAL: No. First of all,
remember that the U.S. -- it's a point that we've both tried to
make a couple of times is that the U.S. is the most open economy
in the world. The goods that flow into the United States -- that
are going to flow into the United States flow there now.

We have also, in the course of the last decade,
become the most competitive economy in the world again. The full
range of goods that we manufacture and services that we provide
are now, in industry after industry, the most competitively
priced and the highest in quality in the world. What we need are
open markets to be able to sell into. And we need, in
particular, markets that are open to the kinds of goods that we
provide, which are high-quality, sophisticated in technology,
frequently capital equipment, most useful for infrastructure and
infrastructure development. So it is in the absence of
agreements like this that a trade deficit of that kind will
persist.

The second point is the one that my colleague made
earlier in answer to another question. Remember that this is not
-- there's not a cliff effect here. It's not that no movement is
made by some set of countries until the year 2019, and then they
do it all at once. Those are endpoints -- is that the movement
begins after the blueprint is agreed on by both sides and by both
sets of countries. And so you will, in effect, have countries
that have been, until quite recently, among the more closed
countries economically, among the more statused countries, and
the country that we're most concerned about --the United States,
that has been for a very long time the most open country on
earth, both changing. But the rate of change will be far greater
in terms of those countries that have been further back.

SENIOR ADMINISTRATION OFFICIAL: There's a false
premise in your question and I really want to address it because
the premise, or at least the implicit premise was that somehow
the newly-industrialized countries as we know them slipped into a
2020 time frame today. That's not what happened. There was a
full expectation of everybody in that room that Hong Kong and
Singapore and the other countries we would normally describe as
newly-industrialized countries would be a part of a 2010 group;
that changing this terminology did not change the effect of where
countries would fall in this process.

Q Then can I just follow up -- could you then run
down who the countries are that would be considered
industrialized nations --

SENIOR ADMINISTRATION OFFICIAL: No, because that is
a process that will take place over the next year. But my point
is, the countries that are developed and that are commonly
thought of as newly-industrialized -- those phrases were
collapsed into one phrase called "industrialized," and those
countries will start out, embark on this process on a 2010 time
frame. And the developing countries -- Thailand and others --
will embark on a longer course. But nothing that happened today,
in changing that terminology, changed the expectation that the
countries that are commonly referred to as newly industrialized
countries, would be subject to the 2010 deadline.

Q Could you just compare the mood between the
leader meeting in Bogor and in Seattle. Is there some -- one is
different or --

SENIOR ADMINISTRATION OFFICIAL: There was a very
cordial atmosphere in both Blake Island and in Bogor. I did get
a distinct sense today, though, that the leaders felt that what
they were doing was something historic. It was referred to as
the equivalent of Bretton Woods. At one point, one of the prime
ministers said, "Probably the only leader who will still be here
in 2020 is the Sultan of Brunei, but I hope that he will remember
what we've done here." And so I would say that there was a
strong sense in that room today that this was a serious,
irreversible, important step that had been taken.

SENIOR ADMINISTRATION OFFICIAL: If I could just put
the finish on that. We both rode out with the President to Bogor
and to make the contrast there -- which is, from our point of
view, obviously the most relevant -- that his view was that when
we began the process in Seattle by asking the leaders to the
meeting, that while we hoped there would be a movement and
development of this kind, there was really no way that we could
be certain of that. And, therefore, Seattle, while an extremely
hopeful start, was just that, a start. I know that what the
President felt was that this was a very important achievement and
milestone. And so he felt quite differently about what happened
in both places.